Welcome And The Waste Problem

Paul Shrimpling 0:05

Welcome to the Humanize the Numbers podcast series. Leaders, managers, and owners of ambitious accounting firms sharing insights, successes, and issues that will challenge you and connect you and your firm to the ways and means of transforming your firm's results.

Ryan Tierney 0:21

And I see waste like nobody else. I can just walk into a factory, walk into a restaurant, walk into an accountancy practice, and I'm like, oh, the waste is just it's just everywhere. There's so much waste, it's just unbelievable. But the point, the fact is that most people walk past it and don't say it. I can't unsay it because I've just been, I I I always say I've got waste goggles on. I just walk around with waste goggles.

Paul Shrimpling 0:48

What do you do to seriously transform the performance of your accounting firm? Perhaps the better question would be: what would you do? What could you do? What should you do to transform the fees per full-time employee in your firm? Well, on this podcast with Ryan Tierney, Ryan, who has built a startup upholstery company and turned it into a multi-million pound turnover business with 60 employees, has gone and bought one of the most landmark engineering companies in Northern Ireland and is transforming that. He's only a year into that journey. So, what could he do to help us in the accounting space transform the results of your firm in this case? Well, let's go and have a listen. Here's Ryan Tierney of Lean Made Simple.

Ryan Tierney 1:40

Hi, Paul. Thank you very much for having me on the podcast. My name is Ryan Tierney from Lean Made Simple. Long story short, I came across this thing called Lean about 12 years ago. Didn't know what it was, knew nothing about it, but something really kind of over overtook my brain and I got really into it. And I spent the last 12 years breaking down this complicated thing called lean manufacturing into simple terms that companies and organizations from all over the world can now apply in their business. So it's a really exciting journey I've been on. I also have three kids. Uh we've just back from holidays. I love going on holidays, love spending time with the kids, I love playing the piano. That's a little bit about me. And uh thanks again for having me. I'm excited to get into this session, Paul.

Paul Shrimpling 2:29

Yeah, me too, me too. And it's um uh uh I can't tell you how excited I am. And then because we brought um about now three three groups of accounting firms out to work with you, your team at CT Matters and at Sperimentals, um, really excited that we can share some deep insights with the broader accountancy profession through the uh through the podcast. Uh, where we typically start, in fact, always start, is a question which uh uh might make you think a little bit, but I'm really interested to see how you respond. Is this called the Humanize the Numbers podcast for ambitious accountants, right? And what does the phrase, given

Humanising Numbers Through Lean

Paul Shrimpling 3:05

your experience of implementing and bringing to life lean at CT Matters and its very metals and and working with many other organizations for that matter? What does the phrase humanize the numbers mean to you?

Ryan Tierney 3:18

Yeah, it's a good question. Humanize the numbers. I I suppose when people think about lean manufacturing, they often think in terms of uh in numbers, they think in spreadsheets, formulas, efficiency, you know, saving time, it's very data-driven. But really, when you go to the essence of lean, it's really about people. And it is about the human behind behind the the the process, the human behind the numbers, the human behind the system that that operates. And I suppose the more I delve into lean, then we go when you go back to the source, back to Japan, back to the Japanese. This whole lean thing started by Toyota, the car company. And if you go a step behind that again, it started with Sakeichi Toyota developing a loom and making an improvement on a loom for his mother to make his mother's life easier. So Lean has just become more complicated, more data-driven, more about the numbers over the years. But if you go back to the source of where this all started, it started with somebody helping their mother with a problem that they had. So there could be nothing more human, nothing more people-centric than lean.

Paul Shrimpling 4:37

Okay, okay. And so and and I love that because that's what got me out to uh uh your your plant in in Limavade was this uh respect the people, respect the process. Now I've I've studied the Toyota production system and applied it to my manufacturing business from decades ago, and I've been looking in my uh uh small way to help accounting firms you know unlock the power of it. Um but it was when that that phrase from your your book, you know, respect the people, respect the process. And you just talked about you know uh Toyota's mum, when you respect your team at Sperry Metals and CT Matters will unpack a little bit more about those two organizations in a little while. Um, but there's other people in this as well, isn't it? How does it play out in terms of customers? You know, humanizing the numbers for customers. I get it from the team perspective, so they've got a better life. You fix what bugs it to use one of your phrases to one of the lean phrases. Um what about the customer?

Ryan Tierney 5:36

Well, so something I heard a good few years ago, and I keep going over and over this quote on my head, and I share it with as many people as possible, is that this idea that most companies punish their customers for their inefficiencies? So just break that down a bit. Most companies punish their customers for their inefficiencies. So because we're so sloppy with our processes, because there's so much waste, we need more people to carry out a task, which less people could do. We need all these systems and all these meetings and all this all this burden and stuff piles up and up and up. But really, when we think about it, all this waste is being passed on to our customer. So we have the power to reduce waste, and that's the whole emphasis and that's the whole idea of lean is to reduce waste. And if we reduce waste, we are serving the customer better. So why would we punish our customers because of our inefficiencies? It's us to up uh it's it's up to us to take that money that the customer is trusting us with and give them back as much value as possible. So when we think about lean, a lot of the time it's very manufacturing-based, very system-based, very internal focused, but actually lean is about serving the

Customer Value And Hidden Inefficiency

Ryan Tierney 6:55

customer. And already we've seen massive results at spare and metal where lead time is better, where quality is better, where customer satisfaction is better. And you might be asking, how do we measure this? Customer satisfaction is a bit harder to measure, but there's absolutely a feeling that everything is getting better. And it's just about reminding everybody in the organization that all we're trying to do is serve the customer. We are here to serve the customer. So there isn't a better system, platform, way to serve the customer better than to build a culture of continuous improvement and keep reducing waste every single day.

Paul Shrimpling 7:41

So they this um I love that um and and 100% agree. And I guess it's it's under there, isn't there a need there for to for you and for everyone at Sperimetal and everyone at CT Matters to properly deeply clearly understand what's of value to the customer? And the same applies to the accounting firms that we're talking to today. I'm just wondering, Ryan, as a customer of I'm guessing more than one accounting firm in the history of the businesses you've worked in, uh, so you've worked with one, two, three, four accountancy firms during that time. What do you think is the value you're expecting from your accounting firm? Because I want to use that as an anchor reference point for the rest of our discussion so that we can um help everyone listening into this podcast build those connections between reduce waste increases client value, customer value. Well, we better get a crystal clear picture on what customer value looks like. And you're a business owner, business leader, which I'm guessing every firm who's listening to this would want you as a customer. So, what do you value from your accounting firm?

Ryan Tierney 8:51

What a great question. And one of my most probably fascinating topics within lean is value versus non-value. And I'll go back to a story that I've told a few times on podcasts and on videos, and it's when I was in Japan about eight years ago, and I was there with a guy called Paul Eckers, author of uh of Two Second Lean, and the guy that got me interested in Lean, I've been to Paul's home, I've been to his factory, I've been to Japan with him on many occasions. But there was one time that we were in Japan together and we had just been to visit the Lexus factory that day, and we were walking through the uh the a big shopping mall on the way back to the to the hotel, and Paul kind of stopped me and said, Ryan, look in that barber shop window and tell me when the value is being added. And I was like, Paul, I'm not sure what you mean. Is it from the minute you go in to when you leave? I I wasn't sure because I didn't understand value. And Paul told me something that I'll never forget, and I've told this to thousands of people from all over the world. Value is only created when the product is changing or anything the customer is willing to pay for. So there's really only two that's my simplest way to describe value. So when the barber is physically cutting the customer's hair, when the scissors are physically cutting the hair, it's value. But when the barber is cleaning up the hair at the end, waste. When the when the barber is taking the payment, non-value. When we're deciding which haircut we want, non-value. When we're putting on the robe and the whatever all this stuff is non-value, the only point at which value is created is when the scissors are actually cutting the hair. And that moment that Paul told me that, I just had a flashback to our company. At that time it was just seating matters, we hadn't got sparing metal. But I was thinking, okay, when we're actually welding, when the metal is being welded, that's value. When the upholstery is being stapled onto the chair, value, just that millisecond where the staple is going into the upholstery, everything else is waste. And whether we like this or not or want to believe this is another thing, but it's true. The value is only credit when the product is changing.

Paul Shrimpling 11:13

Right.

Ryan Tierney 11:14

So if we go back to the accountancy world, and the people watching this will know their business better than me, but in the accountancy world, when is something changing? When are you adding value to the customer? Another way I like to explain it is that if you walk into Starbucks and you order a coffee, you order Americano with milk, the people behind Starbucks need to work as if the customer is actually watching them. So if you order if me and you Paul went to Starbucks, we order two coffees, and we've we've placed our order, but the guys in Starbucks are walking around, they're having a chat,

Waiting Waste In Accountancy Services

Ryan Tierney 11:55

they're talking about the game, they're on Facebook, they're all they're just messing around, they're not adding value to the customer. If we actually seen them, how would we feel? We feel disrespected as a customer, we feel like we're paying you to provide a service and you're not doing it. So we need to work as if the customer is actually watching us. Yeah. And and most of our companies we're not customer facing, as in the customer can't see us doing the work. But if the customer did see us, would they be happy paying us for what we're doing right now?

Paul Shrimpling 12:27

Yeah, yeah, yeah, yeah, yeah. So, how how does that play out in terms of you experiencing the value of the services that your accountancy firms have delivered for you over the years?

Ryan Tierney 12:38

Well, to be honest, and I'm going to be very candid, a lot of the service we've got in the past hasn't been great. And one of the biggest wastes that I see is waiting. I just absolutely have no patience. I don't like waiting at all. And it seems to be in the service-based world, especially with accountants and solicitors, it's just email chains. And it's you send an email on a Friday, you don't get a reply to the following Thursday, and then you reply back the following Tuesday. Like two weeks can go past, and we're adding no value, we're getting nothing done. And it really frustrates me. So I can probably talk more about what frustrates me about it more so than what I like about it, because all I really want is the accounts to put on at the end of the end of the year. All I am willing to pay for is that piece of advice when I've got a question, and all the unnecessary waiting or over processing or motion in between is all waste. And if I had an accountancy practice, one of the things I would focus on massively is the waste of waiting. Because Toyota came up with eight wastes about 90 something years ago, and those eight wastes are still as relevant today as they were back then, and they apply to every company, it doesn't matter what your business is, but there's eight wastes. We don't have to go over them now, but one of the wastes is waiting, and that's the big waste that I see in accountancy and and and legal practices.

Paul Shrimpling 14:07

Yeah, yeah, yeah. Well, we're we're just going through a process of helping my mum sell a house at the minute, and you go, What why is this taking 12 weeks? Any sense at all? Um, we're quite happy to mind about this listers. Uh the accountants will be going, Oh, I'm not entirely sure. I agree with that from our perspective, but you but you make the big connection between you know emails going backwards and forwards when actually he could pick up the phone and get it sorted there and then it could do. Um, but I appreciate your your point about I want the work that I'm expecting on time. So you know, a conversation with well, when do you want you when do you well Ryan, when do you want to see your firm's annual accounts after the year-end date? What's your what when do you want to see it? I see mine three weeks after my year-end date. I'm just wondering when you want to see yours.

Ryan Tierney 14:55

Uh three weeks or a month is is okay, but again, we we want to continuously improve that. We want to work with partners who are always wanting to get better and get closer to when the the actual work happens or when the actual year-end finishes. So sooner the better.

Paul Shrimpling 15:13

Um so whatever it is now, it needs to be better next time, and then you'll be happy, otherwise you won't be happy.

Ryan Tierney 16:16

Well, ideally, in an ideal world, all data and all information should be live all the time. Like if you think about the Toyota factory, I've been to five, six, seven Toyota plants all over the world. They don't wait until the end of the quarter or the end of the year to see what happened last year. They're getting the information live as it happens. Really? As the car's going down the production line, they can see when there's a defect and they stop and they fix it there and then. So we should be running our business like a Toyota production line. We shouldn't be waiting to two months after the year end to see what happened last February. It doesn't make any sense. No, I don't know. So I see the future of accountancy being more just in time and more live data being available on demand.

Paul Shrimpling 17:01

Which is interesting because uh we I I I I've from my I mean I went

Live Data And Just In Time Reporting

Paul Shrimpling 17:05

around Berniston uh not long after it was uh live and open a long time ago, um with uh with a with a scout troop and um came out of that going, all right, I get this. There's you know what and I really appreciated that tack time thing, which you might unpack in a little while because I think that's relevant to this, is what's the tack time for producing a set of accounts or some management accounts or a payroll report or whatever it is? Um, the the what I call the cadence of that. Um, and I've just I've just literally I've got off a call with a the director of an accounting firm um just challenging them around their reporting cycle and KPI cycle, which is every month they see the numbers for the business. And I go, don't you want to know what jobs we're finished today? Do you know, or at the very least, don't you know what know the jobs that have been finished this week and the client signed off on to use a phrase? And they said, Well, we we've never done it like that before. Um, so the the the value is attached to the speed with which the work is done, but only Ryan if the client values that speed, and some clients don't. So, you know, that's the pushback we get from accounting firms is well, there's only about 10% of our clients care whether they get their accounts in week three, month three, or month nine. And so, and it's like, oh well, yeah, let's attach it to the what the client values. Um, I just I guess the question here is how do we how do we how do we wake accountants up to the fact that there's real value in time improvements, even if the client says they don't really care about the speed with which they get the information?

Ryan Tierney 18:48

How do we do that? Good question. I suppose it's a bit like Henry Ford. If they asked their customer what they wanted, they would have said a faster horse. So sometimes we need to go first and show what is possible, show that you can process accounts in this amount of time, show that we can respond within 24 hours with any accounting query. Like be if I was an accounting practice, I would be wanting to be the gold star to bet to be the best example and set the set the standard, go way out in front. Most people sit and be average and try to be the same as every everyone else around them. What we're trying to do at Speran Metal is go so far beyond what anyone else is even thinking is is possible. So we want a one-week lead time for an industry that's typically nine, ten, twelve weeks. We just want to stand out in front. And our our only way to do that, and there is only one way. The only way is continuous improvement.

Paul Shrimpling 19:43

Improvement, yeah, yeah.

Ryan Tierney 19:44

The next new software, the next AI, the next technology, the only way to get there is small, small changes.

Paul Shrimpling 19:51

Small small incremental rather than landmark structural uh changes.

Ryan Tierney 19:56

Absolutely.

Paul Shrimpling 19:56

Yeah. Um Matt if we get a chance to unpack that. But I think it's worth because people don't, you know, I'm I'm having been to spare metals and having been to CT Matters, I'm familiar with it. So can you just give us a a couple of minutes which just goes right? This is CT Matters now. We don't necessarily need the history in terms of scale and nature of work and customers and team numbers, and the same for sparing metals. And let's do a bit of a compare and contrast so people can see that um you've learned lessons and you're applying them.

Ryan Tierney 20:24

Yeah, absolutely. So seating matters is our first family business. Uh, my mother is an occupational therapist. She's seen the need for this type of seating and she couldn't get it anywhere. So, myself and my two brothers started to making one chair and a back uh in a small shed behind her family home. Started up very small and grew up. But seven or eight years into our journey, I was in charge of operations, and operationally the business was very chaotic. Our lead time was really long, we'd loads of quality issues, our customer retention wasn't great. We I personally was really stressed, I was overworked, I was doing long hours, and I just thought there has

Two Lean Transformations In Manufacturing

Ryan Tierney 21:05

to be a better way. And I came across lean and let's fast forward to the way it is today. We have transformed the company to the point where thousands of people come from all over the world now to see what we've done because people can't even believe what's that what's happened. So we've taken it from the worst factory, the worst organisation you've ever seen, to one that produces a chair every 24 minutes without fail. And it's just day and night to to where it was, and it was only possible because of because of lean. How many people now at C T Matters, Ryan? Uh C T Matters, we have roughly 60. 60 people.

Paul Shrimpling 21:49

60 people. Okay, so that journey's seven, eight years.

Ryan Tierney 21:54

Yeah, about about ten years, yeah.

Paul Shrimpling 21:56

Ten years, ten years. And then um uh so spare and metal, then which is a different story, isn't it?

Ryan Tierney 22:01

Yeah, spare and metal is just one year into Erlane journey. So about two years ago. Yeah, just a year last week. So about two years ago, I was getting itchy feet. Uh scening matters got to a point where I I felt like I was polishing a shiny thing and I wanted a new challenge. And I always had this vision of buying a company that was absolutely chaotic and doing a massive lean transformation, but documenting the journey as well. So, about a couple of months after setting that goal, sparing metal came up for sale. Sparn metal is a manufacturer of storage solutions for industrial clients. We make pallet racking, shelving, all types of storage for customers like uh Toyota, for customers like Coca Cola, all the warehousing storage is manufactured. By us. And I'm here a year and we're doing a massive lean transformation, taken from a company that has never heard of lean, that has had chaotic processes, to one that's going to be uh really, really the opposite of that very soon. So we're just in the middle of the transformation, and you've seen that first hand.

Paul Shrimpling 23:13

I have, I have.

Ryan Tierney 23:17

Yeah, it's going well. Yeah, it's going really well.

Paul Shrimpling 23:20

Do you want to explain that concept, the river of metal? Because I think that's perfectly relevant to every accounting firm in terms of the flow of work through the firm.

Ryan Tierney 23:29

Yeah, so basically everything we're talking about on this podcast, everything me and you've talked about in the past, we could sum it all up into one word, and that word is flow. So if we think back to the Toyota factory and you've been to Berniston, the the car is literally flowing to the customer, it's actually moving on a line. So from customer order, we need to think about where is the stoppages and blockages in our business. So from the moment a customer requests information for from the accountancy practice, from the moment we start a task, where is the flow? And anything that where there's a stoppage or a blockage is waste. So we have a phrase that anything that is waiting is waste. So

Flow, Backlogs, And The River Of Work

Ryan Tierney 24:20

documents sitting on your desk waiting, that's waste. That isn't flowing to the customer. Uh 50 emails in your inbox that you've marked as on red, that's a big backlog of work waiting to go to the customer. So all we're trying to do is create flow in everything we do. And the only way or the way that we have found really successful and hundreds of companies all over the world have found to be successful, is by empowering the people in your organization to make small changes to improve flow. That's all we're doing. So an example of that is the river of metal, which we have we are uh developing at Sparn Metal. So literally you'll see the raw material coming into this side of the factory, it'll flow through a conveyor system, and at the other end, a finished product will come off. Because anywhere where that conveyor has stopped, if there's a problem, if there's a query, if there's information that we don't have, we have to phone the customer and ask for a spec or confirm a colour or can convert all these questions are interrupting flow. And when we can see it physically in a in a physical flow line in the factory, we can see the blockage straight away. But in your process, in an accountancy practice, it's not as easy to see the bottleneck or the blockage. It's not physical. But the challenge here, and that I suppose it's an exciting challenge, is to find out visual ways to point out bottlenecks and blockages in your business and then empower your people, and this is a key point empower your people to improve the flow.

Paul Shrimpling 25:57

Yeah. So I think there's two things there. One is that visual ways to see the blockages opens all sorts of questions from the and and applying that to the flow. So if if an accounting firm maps all the stages of the project, the job, whether it be an audit, a payroll, annual accounts, whatever it is, that you see all the stages, and you're looking to identify the uh stoppages and blockages, which will have a time allocation, and you can add all that time allocation up. There you can see the waste, particularly if you apply a cost per hour to that, um, which might scare the living down. I think they all know already, by the way, right. They all know every firm we've worked with knows, but they don't know the detail or the quantum across the whole of the firm. Or, and I think this is what's important, isn't it? The um for each individual set of accounts, there's a business that's reliant on that set of accounts, it's very personal, like every chair is very personal at CT Matters, every piece of racking is very personal to the solution that the pain it's going to take away from whether it be Toyota or Coca-Cola. Um, yeah, but how does what what sort of examples can you share that might visually help a firm of accountants start to see the flow or see the blockages and waste?

Ryan Tierney 27:31

Yeah, one of the things we're doing at Spurn Metal and is to create an obey room, and you're maybe familiar with the word Obea. So Obea knows if you go back to the Japanese, Obea is like a war room where everybody comes in, it's a visual room with all the charts, graphs, um, everything all the KPIs are visually presented in a room. So we're in the future going to create an Obea room where we can walk into one room in the business in the factory and see the status. And I have this plan for like I can just imagine like six or seven huge flat screen TVs, and I just want to say, okay, production is on track, uh, this is who's clocked in today, this is our debt, this is our creditors. Everything is going to be on screens live. So the future is not, oh, let's run a report and see how that's going. The future is there's

Visual Management And Obeya Thinking

Ryan Tierney 28:25

the data and it's right there in your face, and you can walk in or pick up your phone and see it at any point. So this waiting on reports or having meetings about something that happened last month, I think is going to become a thing of the past because we need the data right now, we need the live data. When you're on the Torah production line, you can look up and see what the status is. They're not waiting six months to get a report. So anywhere it's about trying to make your business and make your accountancy practice as visual as possible. And it doesn't have to be screens, it doesn't have to be all this fancy technology. You can actually start with something really simple. I've seen a company in America with a cup system, they've got red, green, and yellow cups. And if somebody's burdened or somebody's behind, the red cup goes on top of their desk, so you know that person's behind. It's a visual visual aid to show okay, Paul's burden now. Just leave him. He he needs a few hours for himself to get he's behind on his work. Another thing we have, even on our phone system, we have an an-on. So back to the TPS Two other production system, they're big on and on. So we have and all around the office. So when we're on a call, the and-on physically turns red. So I know somebody knows not to interrupt me right now when I'm on this podcast because my and-on is red. Yeah. So there's physical visual things that you can do in your business to identify burden and identify variation. That's kind of the two things. If we were to sum up lean and two things, is burden and variation. Because all waste starts from either people being under too much burden, too much stress, they start to make mistakes or making defects, or variation. When something goes out of the ordinary or abnormal. Non-standard. Non-standard, yeah. So these are the two things to focus on in any accountancy practice. Where is their burden and where is their variation?

Paul Shrimpling 30:27

Yeah, and and when uh when when I was preparing for for this discussion, I I talked to and messaged all the firms that we've taken up to CT Matters, Ryan, in terms of what questions they wanted to ask. And one of the things one of the questions that came back was very much connected with look, um uh one piece of racking is the same as the next piece of racking, which is the same as the next piece. Now I know you've got variation and there's different models, but you know, ultimately there's standardization built into manufacturing by definition. You know, there's components of each chair are similar or identical, and there's some variation, but there's it's um it's manageable inverted commerce. In an accountancy firm, the pushback we get back is look, every customer has got different requirements, every um set of annual accounts is different because their business is different from the next business, and so they've got a different number of transactions, they've got different types of services, products, uh different profit centres, and then also we've got different people working on different projects at different levels, and there's so much variation we can't even consider the standardization of this process, and so the variation is built into the way it all works, and that's before we've even had a conversation with the client around you know your comments earlier about I want it quick and I want good advice. Oh, so now we're into intellectual capital. You know, there's a it's in the the value's in the conversation with the barber, not just the cutting, it's

Variation Versus Standardisation In Services

Paul Shrimpling 31:55

enjoying the process. There is value in the enjoyment, not just the scissors being cut. Just I'm just twisting that slightly because I value the meeting I've had with Neil, my accountant, this week, because he's helped me make two very big lumpy decisions this week. Um, now that might have taken two minutes, but it's profoundly valuable. It's not worth two minutes of chargeable time, it's worth a significant proportion of my capital value. Um all this variation. How do we help accountants move from this this is too big a beast around variation to one where no, actually, I can see the flow, I can see the blockages, I can see the standardization, so we can recognise the variation, recognize the burden. What do you think?

Ryan Tierney 32:41

Yeah, I actually can't wait to get in this because somebody last week came on a tour and they had the exact same question, and we went back and forward for like 30 minutes, and I think we we we really got somewhere. And then I've got another example that happened about three weeks ago as well. So I'll tell that story. So I have a videographer that helps me with all the YouTube content. His name's Alistair, and he's absolutely brilliant. Since he started helping me with the YouTube content or views, like with three point something million views on the channel, everything went crazy because his video quality is absolutely brilliant. He's just he's a gift at videography. So between my storytelling ability and his videography, the two it was just a perfect match. But about three months ago, Alistair says, you know, because Alistair didn't know anything about Lean, he didn't know anything about continuous improvement until he started working with me, and then he started making improvements to how he does it, does the edit, to how he sets up the studio, to how he plugs in the lights. And about three months ago, he was kind of stuck because he was trying to systemize the edit on the video and it was too the the outcome was actually worse than the way he was doing it before. So we figured out that or I kind of helped him and coached him through it, that there's so many controllables, and to control the controllables first, and to focus on systemizing how you set up your studio, focus on systemizing how you pay your employees, focus on systemizing how you open up in the morning, where you find your car keys, how you make your cup of coffee, how you clean the kitchen, how you do payroll, how you manage health and safety. There's so many things that are standardized. And if we focus on improving all the standardized stuff, that will then allow us to be creative. Because you actually don't need a process for everything. You Alistair shouldn't have a process for how to do the edit because it's too stringent, it's too strict, it takes the creativity away. But Alistair is now focusing on everything else outside of the edit. So that when he's in edit mode, he doesn't have to think about anything at all, only the edit. No distractions. He can be in full creative mode. Yeah. So I think sometimes people try to systemize something that shouldn't be systemized. Yeah. So that conversation with the client about their annual accounts or some tax query, you can't really systemize that. But there's a million things in your business that you can systemise to free you up to allow you to be creative when you're in front of that client.

Paul Shrimpling 35:26

Yeah, yeah. I think actually I'll push back slightly. I think you can standardize, for example, those three things we have to talk about in every annual accounts meeting with every client, irrespective as to the variable. So in there, there's a framework and structure. But outside of that, once you've got past question one, who knows where the questions are going to go? So we need to actually have the skill, like the videographer's got the skill and the talent, the skill and the talent to then pursue a different question in order to drive towards the advice that the client will value, make a better business decision, and stay with that accounting firm and be happy to pay the bill. Um, yeah. No, very good. So standardise what can be standardized in that support environment space as opposed to the creative intellectual property space. Interesting.

Ryan Tierney 36:14

Yeah. But plus the other thing is that everybody thinks their business can't be standardized. Everybody thinks so. Yeah, yeah. So I could say the same for rack and people think, oh, you're making rack, and it's all the same. It's actually not at all. And people used to say, Oh, but a chair is a chair, every chair is the same. Actually, now there's like thousands of different variation combinations, bespoke things we've never done before. Yeah. But there is standardization within it because we're still making a chair. You're still doing a set of accounts, we're still making paladracking. There is more standardization than you think when you step back a bit. It's just trying to identify that.

Paul Shrimpling 36:51

Yeah, yeah. I'm just I'm just turning to my phone, uh, Ryan, because uh a question came in from one of the firms that uh has visited uh you and your team. Uh in fact, it was Luke who came to Sparrow Metals as well, who you met. Yes. Um just I just need to I'll pull that up in a second. Um, but I think uh can can you just whilst I'm looking for this, there's my biggest insight from the three visits I've made, and I'm ready for the next one now, um, is um that the the your concept of waste makes eminent sense and is practical. Um when we look at the eight wastes, um, it does have a real feel for being in that tangible manufacturing product-based space, and um, and that's what a number of accountants that we've worked with on this have struggled with. But we've turned and and flipped that and go, look, waste is it's like if you look at a coin on one side we've got tails called waste, on the other side we've got heads called value. Is let's if we either reduce waste will improve value, if we improve value will be reducing waste. So let's have a value focus. I just wonder what's your interpretation of what I've just shared there.

Ryan Tierney 37:57

Yep, I think it's a really good point. And my answer to that is that every company watching this, every accountancy practice, every organization should come up with their own wastes. You don't have to call it Toyota's eight waste. We we do because we're manufacturing and it's it's very similar. But in our marketing department at Satan Matters, in our design department at Satan Matters, we have the six wastes of design. One of them is, for example, delayed delayed uh feedback. That's a waste. Yeah. So it's about identifying terminologies that fit your business. Because if we're talking about transportation in a manufacturing factory floor, like in an office, we we we could argue that there is, but there isn't really transportation, it's not really the biggest waste. So it's about reframing the terminologies and coming up with the six wastes of accountancy practices or the eight wastes or the whatever. Yeah, yeah,

Systemise The Routine To Free Creativity

Ryan Tierney 38:55

yeah. And actually, a really good exercise is for everybody together, their team, maybe after watching this podcast or after talking about or working with yourself, Paul, is to come together and say, okay, what how can we identify five, six, seven wastes that I that creep up in our business and get them to put a name on it?

Paul Shrimpling 39:16

Yeah. Uh in and around that, maybe the time, the blockages, whatever they actually physically or non-physically look like. Um and I think when when when I was preparing for this conversation, I was talking, what I was looking at, what is it? What are what are you know I've been in the accounting space for 24 years and bought from six different accounting firms. What is it? And we're constantly talking to them about what's the value equation in the client's heart and mind, and are we doing everything we can? But what I've loved from this podcast is as if the customer, the client was watching you do it. I think that's that's powerful, that is. But what I bottomed out was look, accounting firms deliver reports, an audit report, annual accounts, management accounts, they deliver those. That's so there's those things get delivered, there's value attached to that, and they have meetings with clients and calls with clients. So there's value attached to that, which is connected to advice and reassurance and a whole raft of emotional payoff, not necessarily tangible payoff, albeit if those meetings with the reports result in decision making that benefits the business, they're in a good space. And then the other area of value is they do functional work for their clients, whether it be payroll work or bookkeeping work, to um help facilitate the reports and keep the team happy on the grounds they're getting paid. Um, so there's reports, meetings, and functional work. Um, and so I guess they've got to break down, haven't they? Where are the wastes attached to the reports? Where are the wastes attached to the meetings? Where are the wastes attached to functional work? It may be a way of analysing the wasteslash value equation uh across those three things. I'm just I'm just talking out loud, Ryan, because I was just I wasn't sure where this would go. Um any thoughts on that?

Ryan Tierney 40:59

Yeah, I think the first thing, and we should almost have this lit up on lights in our office or on our factory floor, is the whole goal is to see waste. Just see waste.

Ryan Tierney 41:14

Just see it. And I see waste like nobody else. I can just walk into a factory, walk into a restaurant, walk into an accountancy practice, and I'm like, ah, the waste is just it's just everywhere. There's so much waste, it's just unbelievable. But the point, the fact is that most people walk past it and don't see it. I can't unsee it because I've just been I I I always say I've got waste goggles on. I just walk around with waste goggles. But once everybody in your accountancy practice sees the waste, don't worry about how to improve it or what metrics or what improvements or how to solve a problem. Just see waste. And if there's one takeaway from this podcast, everybody should go back and reflect on okay, how can I see waste?

Paul Shrimpling 42:01

And it's back to how do you make it visual, which means that you can see it and therefore you can tackle it.

Paul Shrimpling 42:08

And if you haven't worked out what the flow of work is around annual accounts, clearly in a visual way, you are never going to see it. It's going to be hidden behind a computer screen, it's going to be hidden behind what are they doing over there? I've no idea. Because they're just you know beavering away on their computer. Uh no, very good. But I think I'm taking away, oh, there are wastes in terms of report building, wastes in terms of meetings, wastes according to functional work, which then maybe there's ways and means of making it visual as a consequence. No, very good. Yeah, very good. So I found this question from Luke. Um so uh Luke came, went back, uh came in really I was nearly said, cynical then, um skeptical, certainly. Uh, and once he processed it, I think he got it in terms of it's a cultural

Build Your Own List Of Wastes

Paul Shrimpling 42:55

thing. Lean improvement is a cultural, this is how we do it here thing, to take a line from Gerber. Um, and he's got six different businesses, and they've set six different improvement WhatsApp groups, um, and they're trying to create pull around um improvement, so they've been overly positive with everyone who's contributing an improvement, and they've made, and his these are his words. Uh we've got improvements are mostly cosmetic and kitchen or environment related. Um, but how much and what type of training or effort needs to be applied to helping the team make improvements that actually generate reduction in waste or improvement in value? What's what what's the flip from all look? We've got labels on the uh the three waste bins from the uh kitchen area to actually we're driving improvements in the delivery of reports, meetings, and functional work for clients.

Ryan Tierney 43:57

Yep, so it's actually a brilliant question. And I always talk about there's three types of improvement or three levels. So a level one improvement is a simple one like making a place in the canteen for the cups day. Uh a level one improvement might be having a a standard work for how to clean the coffee machine. A level one improvement might be a place for the car keys on the side of your desk. So level one improvements don't need any approval, you just go and do it. It's small things that bug us every day, and if we do loads of these, then we improve flow and we actually make work more enjoyable. And those things are good and we love them, but they're never gonna transform the business. But they are absolutely necessary to build a culture because if I walked into sperm metal on day one and said, okay, everybody

Level One To Three Improvements

Ryan Tierney 44:55

has to think of one improvement that's going to transform this entire business. Everybody would be like, I can't think of anything, their mind would just shut down. Yeah. It's not easy to think of big things. But once you encourage people to to fix small things, okay, make a label for the bin, let's label my pen, let's make a place for my car keys, let's make a stream deck. So when I'm doing the zoom call, all I have to do is hit one button. Once people get into the mindset of improving, then every so often, and this is starting to happen already, it's bare metal, every so often people are like, oh but I always have to walk here or we always run out of this or why does this customer order this yellow? We have to order it in and it's twice as expensive twice as much as this type of yellow. Can we not standardize both yellows? Actually, yeah we can. So once we engage people in the small stuff then they start coming up with the bigger stuff. So you can never jump to the big stuff. And I see people trying lean and they fail after three months, four months, five months because people are stressed out trying to find these big things all the time and they just can't. But our whole thing is fix what bug us fix what bugs us. Small things all the time like I made a an improvement for where to get the batteries for the mouse so anytime the mouse runs out of batteries there's a crumb trail I know where to get it. It seems like a small thing. Yeah it seems like every improvement on it's in isolation seems insignificant almost seems like a waste of time but when you multiply them up in the compounding effect then when people start to think in terms of value non-value that's when the big improvements come I've got a really good story a guy Sandy who you might have met when you were here at Sparn Metal so this was about six months into your lane journey people are making brackets to put their brush and shovel in the wall they're making labels for their tools did we see productivity ramp up? No we didn't we honestly we didn't but I know the process I've seen this so many times that number one thing is get people engaging in level one improvements. And every so often they'll think of a big one. So Sandy came up with this improvement. He was walking for 25 minutes every single morning and evening to switch off the compressor this this video's on on YouTube 25 minutes a day Sandy's been here for 48 years. 25 minutes a day for 48 years you don't have to be too good at mouths to work out how much time we've wasted turning on a compressor and Sandy said for years and years I've been asking for a switch right behind my chair behind my desk that I can just switch on the compressor and we said let's do it let's look at it we got an electrician in it cost 400 pounds we put on the switch sandy saves 25 minutes a day but how would that be level one or level two right would that be level one or level two see Sandy started that that's level two. It cost four or five hundred pounds we had to get an electrician in we got an outside contractor but the the point is that Sandy never would have came up with that unless he was engaged in the small stuff first.

Paul Shrimpling 48:20

Right. 25 minutes a day for 48 years that's that's just wow but that's you know that this is how we've always done it here isn't it it's we've always done it like that. It's just putting something in place that challenges that this is um and I'm conscious of managing time so there's a big big question which is burning me right which is in in an in every accounting firm we've worked with over the last uh couple of uh decades or so um there's we're in a um sort of legal compliance space with audit and with accounts and so on so you you've got to tick certain quality boxes and so on um and and therefore there's a real sense of needing control over the quality standards and so if we free up everybody in the firm to um uh improve the level two maybe probably maybe I don't know level three improvements um we're out of control because I've got someone over here is doing it that way and someone over there is doing it that way. I think it's worth just um you sharing uh one or two or three key insights in terms of no this isn't in conflict you know autonomous I've been around CT Matters three times now and everyone seems to be like they've got this like autonomous hotspot of improvement and um you know Patty's improvements in the woodworkshop just blew me away in terms of you know it was three people uh but we've doubled turnover and reduced it to one person running the woodworkshop so in terms of profitability improvements it's massive um what do we do to tackle this you don't need to be frightened of people making personal improvements it's not a loss of control it's actually a reduction in waste that the the the leaders and managers of firms that we work with are really struggling with that Brian yep it's it's a brilliant point and every company struggles with it and sperm metal to this day honestly I'm being really honest we still struggle with it right because we're only a year in and we want to give people the freedom to improve but at the same time we need to be careful that they don't improve some things that are really critical to safety or quality. Right.

Ryan Tierney 50:33

There is guardrails that we need to put on so the the the best way I think the best advice I can give is that the leader of the organization must internalize lean first. They must really understand what's going what's going on here because too often I see people that come on a tour of seat matters they go back the next day and start doing improvements and I'm like nah it's too soon you don't know what you're doing yet you can't go out and and and and play a game of football without training on how to pass you need to learn the basics you need there's actually a skill and some basics that we need to learn before we can start

Guardrails, Approval, And Leader Training

Ryan Tierney 51:11

this so what what I would say is that the first thing is that the leader of the organisation and the management team need to understand what's happening. They need to understand lean they need to understand continuous improvement they need to understand value versus non-value and then slowly and systematically teach people what's happening and this is why the morning meeting is such an important thing because at Spurn Metal we don't we haven't yet give everybody the autonomy to go and make improvements because it's too early. So the way we're doing it is at one department at a time so on a Monday we're improving the dispatch shade and working with the seven or eight guys there. On a Tuesday we're improving the welding shade and working with the guys there. On a Wednesday we're improving roll farming on a Thursday we're doing it in the office. So we're slowly moving around different areas and working with the people to teach them on what an improvement is because at Seton Matters we wasted so much money labelling stuff that didn't need labelled somebody relabeling something that was already labelled just to be seen to be improving doing something for the sake of it yeah for the sake of it. So we took a different approach yeah exactly we took a different approach at sparing metal and it's slower but slow is smooth and smooth is fast. So it's to slow it down and teach and train and say this is what an improvement is and that's why level two and level three need approval that somebody has to sign it off. You can't just go and change the design of a pallet rack that may cause a safety issue on in a in a in a factory somewhere so level one no approval just go and do it but people still need to know how to do that then approval for level two and absolutely approval for level three and and presumably level three is just the the the the scale impact across more people cost and time investment is just greater than level two I understood that right exactly like we're buying a new laser machine that's £1500 that obviously needs needs approval and sign off.

Paul Shrimpling 53:27

Please forgive this brief interruption Ryan's unpacking a number of the elements of improvement process management in this podcast. If you want to dive deeper and have a look at the business breakthrough report that unpacks a little bit more and references Ryan's book please go to the business breakthrough link in the show notes.

Ryan Tierney 53:50

Let's get back to Ryan then I just wonder when when when when's when when are you intending to um buy an accounting firm and uh and and lean it then Ryan is that is that on your radar that might be the next project yeah well if I could help let me know but let let let let's say you did and this was a question from Sam who who came up last time we were together and um yeah you know if if you were to take over an accounting firm what what would be the you know the first one two three things you'd um look to do knowing that it's got nothing to do with manufacturing it's not tangible it's all intellectual property fifty circa 50% of the cost of the business are people costs um there's this sense of needing of control you know the things that we've covered today where would you start how would you start yep the the first thing I would do is exactly what I'd done at Spurn Metal so about three or four weeks in the door I was just going around learning people's names getting to know everybody learning the product learning the industry saying hello to everybody and then after about a month we took every single person to Seat Matters to show them to show not not to teach not to to show just to show them what's possible we didn't try and ram it down every anybody's throat we didn't say this is the way we have to be or else we're just like we're just gonna go to Seat Matters let us know what you think just just have a look to show what what's possible and that was like a massive step forward because to sit and explain this to somebody over a PowerPoint or a video or you know to read a book it just wasn't it probably wasn't fast enough for me either. I wanted to just get everybody there and 12 people at a time we just sent every single person to SeatMatters on a tour and when they came back they were starting to identify problems and come up with improvements like like the next day. So if I was to buy an accounting practice the first thing I would do is to go to another company that's really successful at at doing this and you don't have to call it if if I was an accountant I probably probably wouldn't call it lean to being honest. I would probably brand it as a different thing. Like David Brailsford calls it marginal gains yeah we call it we call it lean

Where To Start And The First Steps

Ryan Tierney 56:05

other people may call it continuous improvement companies have rebranded it as their own their own name or whatever and that's okay you have to make it work for your business because maybe sometimes the word lean has a negative connotation not for me it doesn't and I'm trying to overcome that and and spread the message that lean is a positive thing but for an accountancy practice I may even change the terminology and this is me just thinking out loud if I bought an accountancy practice to make it more applicable.

Paul Shrimpling 56:37

Yeah I might call it marginal gains I might just to make it more relevant yeah yeah well I love that I'm I'm I find myself constantly saying that words labels the words you use are important because they either trigger a positive response or they trigger a negative response. So you get the word and get the labelling right.

Ryan Tierney 56:56

So you've challenged me there Ryan to go well what what could that should that be and we'll perhaps have a um a check-in with the firms that we're working with on that um and but even like if if we're summing this up I love like if we're really summing this up into something very simple is that the future of business the future of organizations is involving the people who are doing the work and decision making. Yeah like every industry's changing we just happen to be ahead of the curve at Seat Matters at Spare Metal loads of other companies are getting on board with this but there is a wave coming where the people on the Gemba the accountant at the desk who's actually doing the work for the client they're gonna be empowered like the the the the span of control is changing massively people here on the Gemba doing the work are going to I I I can just see this happening more so over the next five ten years they're gonna be empowered to come up with changes and come up with ideas to drive the business forward.

Paul Shrimpling 57:59

Yeah 100% and we we we we're constantly talking to firms about are you are you purpose led which is another thing that blew me away at CT matters you know you make life changing chairs and every one of the 60 people are connected with that powerful purpose statement as well as what the value equation is for the client and therefore can recognise the waste and then you've got all the visual stuff in place and if we can get anywhere near that within the accounting profession I think we could potentially change sorry not we but the accounting profession can change the way it works for all businesses because if they they can lead the line on this um lean process improvement uh you know marginal gains whatever label we end up choosing for this um there is a there's a real transformation of the quality of life for the employees the team that we work with and the quality of the experience from a customer's perspective and we'll have uh we'd have lived a good life then Ryan won't we so yeah yeah absolutely yeah amazing so last question then we'll go um uh of everything we've covered off today what do you think is the singularly most important first step I think that the one of the first things is to have a just like what you said have a clear vision of why you're even doing this like what's the point?

Ryan Tierney 59:20

Why even bother? Yeah so our vision at Seed Matter is so clear our vision at spurn metal is so clear and everybody knows why we're doing lean we're not just doing it for the fun of it we're not doing it to you know provide a good culture that's a byproduct we are doing this at spurn metal we're doing the biggest lean transformation the world has ever seen and in the process inspiring thousands of people from all over the world to embrace lean in their organizations. So spurn metal is just it's just going to be this example factory this example business where people already it's happening already people are flying from all over the world to see how are you even doing this this is amazing I've never heard of this before teach me show me so we we have a really strong purpose in that we're inspiring people from all over the world to do lean and actually our product is actually a lean product because we're it's a storage product so the product and the philosophy are go hand in hand. And but the the the why is so strong so that's step one have the why so strong be super clear on why you're even doing this it's not to cut costs it's not to get more revenue it's not to make your people feel like they're working harder it's this is you that you have to come up with a clear why then second thing is to visit somewhere that's doing this successfully. And then step three focus on seeing waste just to see waste.

Paul Shrimpling 1:00:49

Brilliant love that love that um and you know we'll be uh we'll be uh taking the next group of accountants leaders of accounting firms over to uh ct matters soon enough hopefully folding it in with spare metals as well right um so if you listen to this and you want to join us you can go on your own you know uh just you can book on the on this on the uh LeeMade Simple website I know um but we we we run a a workshopy piece so that we can get down into right what an accountability piece what you're gonna do and let's have a check in and make sure it gets done so we can actually get some momentum going. So I look forward to hopefully seeing you again um then Ryan I can't thank you enough for uh you take time out of your ridiculously busy schedule and investing in the future of the accounting profession. If only one firm takes this and does something with it it will be a win but hopefully it'll be uh significantly more than that I can't thank you enough.

Ryan Tierney 1:01:40

Invitations, Links, And Closing Thoughts

Ryan Tierney 1:01:40

can I thank you as well Paul because the passion you have for lean the passion for continuous improvement and what you're doing in the accountancy space is just it's unbelievable and it's it's like me and you're side by side driving this forward and trying to motivate and inspire people and it's it's absolutely working.

Paul Shrimpling 1:01:58

So well if it was a relay Ryan you'd be coming into the finish line and think I've just set off but I'm uh but I I appreciate I really appreciate the uh the encouragement thank you and I'm not letting it go um so I look forward to see you next time um you're a bloody star you are thank you for being here in just short of 60 minutes Ryan has helped unpack some of the principles processes and physical things you can do to improve your accounting firm if you want to go really deep on this because you want to transform the results of your accountancy firm you might want to join us with other ambitious accountants like yourself at the next trip we take to see CT Matters meet Ryan his brother Martin maybe and other people within their organisation but most importantly the people on the shop floor and see really experience the drive enthusiasm and passion and seriousness about waste reduction and value improvement for the client I can't tell you how impactful it is I've been three times and ready to go for the next four five and six times it is that good but I would say that wouldn't we don't make any money out of this process it's just getting you and your team to experience something which is genuinely transformative. If you want to talk to us about this experience go to the link in the show notes and we'll look forward to having a chat with you.